Sawmill on the Farm - worthwhile, or nah?

[Charles_in_Ontario]

Hello Forum Folks,

Had to sign up, because you all seem to offer a lot of experience and insight that I am certainly in need of.

Quick summary: Moved back home to Ontario a couple of years ago (divorce). Had been farming down east. Approached a very successful uncle of mine for some business advice (wanted to start a landscape business, focussed on edibles). Turns out he owns a big tract of land (350 ac+) on the edge of town here. Told me if I wanted to grow food, grow it there, not in peoples yards: go for it - I have carte blanche in the fields and bush: uncle is just happy to give me an opportunity with something he just regards as an investment...

Location is incredible - main road, super close to town. Had almost $0 to get started, got rolling with CSA model (customers pay upfront for weekly boxes of veg) to generate some capital. Had fairly successful season - really nice customers, and got the $ ball rolling at least. Getting geared up for 2015, things are looking good. Have a bit of livestock as well.

Problem: I do not own this land, and will never own it (primo dev. land). Will continue to farm it, but need a more profitable venture to reach my goals. Also, would be nice to make the most of the 5-6 months of winter we get here...

Most of the land is forested, some of it with pretty decent hardwood timber (red+white oak, hickory, maple, ash). Sold cedar posts last year (did so-so), have been focussed on firewood this winter, but haven't really "gone for it". Have my wood piled by the road (lots of interest already, also some theft - now have a gate...)

Anyway, really finding the market gardening rewarding, but not lucrative enough given the labour costs and endless infrastructure needs. I feel like the real money is in the woods - looks that way on paper as well. Doing things very manually, we're felling, yarding, bucking, splitting, hauling and piling the wood at the rate of at least one cord/man/day. A full cord of wood here is worth $300. There are lots of sawlogs out there, and outside of hating to see them burned, I wonder if it wouldn't be more profitable to mill them - does milling lumber instead of firewood pay, in light of the added investment?

I don't really want to get into planing, kilning, etc. Just want to get the most from my logs (as well as supply the farm's need for lumber).

Gear I have:

Stihl 271 (An east coast sized saw, I know I need a more powerful one)
2006 F-250 4wd
Team of horses
Basic bush gear: heavy duty bobsled, chokers, peavy, pulp hooks, etc.
Splitting maul

a 70hp tractor with front end loader is on my list...

I worked quite a bit on a friend's old school rotary mill as an off bearer, so have a fairly decent beginners understanding of breaking logs down. Also, I lease a house backing onto the farm, and have a good site for a mill, with direct access from the forest.

I know (and this goes for farming as well) that there's no point of producing anything without a good marketing strategy... The firewood is a pretty easy sell, the milled products, not so easy...

 

[Haywire Haywood]

Your uncle is letting you log HIS property and you keep the money? Wish I had 2 or 3 uncles like that. LOL

 

[Sagetown]

The Farm Sawmills I've seen around here don't last but a year or 3. Once their own timber is depleted to the point it becomes too costly to retrieve, they find themselves in more debt than they can bare.

 

[El Quachito]

Firewood holds a similar price in my region. Could I make more with a mill? Maybe. But remember the real sawmills are experts at squeezing every last penny out of a log. Would I be able to do that also? Sounds like you have some know how in that area already.

Sounds like a tempting venture, that is for sure! The firewood market is so easy to get into for me--I would be worried about selling my tomatoes or lumber more than my firewood.

People laugh at firewood and say things like, "you must have more time than money." I don't know, you take a log and produce something of value from it using machinery and labor. I can make top grade firewood but I think I would be challenged for quality in the lumber market.

Welcome to AS. I find this site to be one of the better online "communities" for information and amusement.

Cheers.

 

[El Quachito]

So you have made some firewood and sold it. I have done the same. The question I ask myself is how crazy would I be to try going big, like you mentioned.

 

[Charles_in_Ontario]

Yes,

Your uncle is letting you log HIS property and you keep the money? Wish I had 2 or 3 uncles like that. LOL

He is very generous, and can certainly afford to be! Self made no less! Successful to the degree that the stumpage is worth less than the opportunity to help out a family member. Believe me, I thank God and lol too!

 

[Charles_in_Ontario]

So you have made some firewood and sold it. I have done the same. The question I ask myself is how crazy would I be to try going big, like you mentioned.

Not sure how "big" I want to be, but if I'm working the bush Nov-March, and there are sawlogs in there, and I do use a fair bit of lumber myself, would a mill make financial sense....?

I hear you: yes that log might be sawn into something nice, but there's a lot of handling and gear in between. And those thick, clear logs make a lot of nice fuel very fast...

 

[mesupra]

I would not plan on getting rich but it sounds like with the access you have to wood you could make a great deal more money sawing logs vs cutting firewood. The problem becomes selling boards vs firewood, there are many more folks burning firewood than building structures. If you can afford it get yourself a cheap <$5000 mill and feel out the market. Used bandsaw mills are becoming more common and hold their value VERY well. I have owned a HF bandsaw mill for a little while now and although I am very happy with my purchase I often wished I had spent the money for a slightly larger capacity mill.

 

[KiwiBro]

Just a few ideas, your mileage may vary.

Could you talk with a few millers in your area to gauge how busy they are, if and how much they'd pay for saw logs? It might be worthwhile to just step a little bit sideways into selling the good logs to local mills while still firewooding the rest/tops, rather than spending money on a mill until you are sure there's a market for the product. The crux will then be how are you getting those logs to the mills and with what gear? If you can get it to them without spending too much money on more gear, then great.

Or, are there many horses around your area, and any farm building/fencing contractors who'd buy or their customers would buy the oak boards from you if you had a sawmill?

The thing that sends most mills under is not having the cash to ride out slow periods where customers aren't paying quick, or log supply/board demand dries up. After committing to the mill, how much $ will you have left to cover such slow periods?

Are there enough sawlogs, easily accessible with the gear you have to more than pay off a mill (or a re-sell market for the mill if you run out of logs and want to flick the mill off rather than pay for logs)? A fatal flaw of many in this situation is thinking them thar woods are packed with saw logs, because the edge of the woods have good trees. Have you walked a good portion of the land and got some realistic estimates of the saw log volume within reach of your gear and budget?

If you committed half the $ you are looking at for a mill on increasing firewood production, would there be enough demand to take the added production? In other words, will that be the best return on your money at this time? I mean, where's the bottleneck in your operation now, how much would it cost to overcome that bottleneck, and what would the extra production realistically bring in extra revenue to justify choosing to spend your $ on that rather than other things?

 

[Charles_in_Ontario]

Hi guys!

Thanks for all the input @KiwiBro, @mesupra, @El Quachito, @Sagetown

Yup, I have walked the whole spread many many times and have a fairly good idea of what's there. The mature woodlots are scattered around the farm, on rocky knolls (all of the clay was cleared, and much is growing up in scrub - other than the hay land, it was given up on 1952). The biggest patch would be an old sugarbush of about 20 acres (with some huge huge trees), and there are smaller chunks all over, as well as lots of areas of regen, covered in ash, birch and maple ~12" (nice firewood...)

The access is excellent: a gravelled, solid right of way goes straight through the middle of the property and there are trails everywhere. The horses can get in and out of the bush no problem, yarding to a landing accessible with a wagon/tractor/truck. There's not really any 'pockets' I can't get at.

Here's some typical examples of what's available to harvest: there's maple and ash and red oak out the yin yang, with the hickories and white oaks in >18" less frequently. (Note also, there's at least 20" of snow on the ground too!) Just walking and looking and thinking, with me, a hired hand and a team of horses, we'd be many winters getting all the timber out...



About the $$$.... Here's a few thoughts:

Looking at my 2014 books: I spent a few thousand dollars on lumber last year - this isn't going to change any time soon: if anything I will need more lumber...

I'm not looking to move on this until the fall, when conceivably I'll have about 10-15K to throw at it. I'm not looking to finance it. Something like an Lt-15/28

In regards to selling sawlogs, I'd question whether there's much more money in it than processing it and selling it as firewood - but I don't know.

Another reason I'd like to saw, is that I'd like to develop a "trade" less seasonal and weather dependant than market gardening... There is money in growing veg: there's also a ton of hired labour and other expenses as well as 6 months of the year with little work/income. I'd like to get away from it eventually, and focus more on hogs and a non-farming trade. I am good in the bush, good with horses and I like working around mills... I figure, at this stage (ie: access to wood that eventually going to be cleared anyway) it's a good time to test the waters, develop some skill and at least supply my own needs, if not make some money at it...

Again, thanks for the feedback!

 

[Kicker_92]

Pick up a small manual mill and cut beams and timbers.
Don't try to compete in the dimension lumber game.

If you slab heavy and box heart ties and beam, you will have lot's of offcuts for selling as firewood.
Combine that with the tops and non-sawlogs and you can run your firewood business with timber sales on the side. (not the other way around)

I'm the opposite where all I want right now is high grade lumber, and am drowning in firewood on the site that I'm trying to sell / give away...


Hope that helps!

 

[mad murdock]

If you don't over buy on the mill side, you will definitely come out just in the money saved on the lumber you consume in your own operation. The problem could come in that if you have some highly figured wood and you just mill it and sell it as fence lumber, you are really short selling your product, and not getting the most out of the lumber. Not every piece will be primo, but if you know what to look for, then you can "grade" your wood as it comes off the mill, and you can plan your cuts and sticker/stack accordingly. Also knowing what sells in your area, is a plus. I think that you will do well to concentrate on niche markets, and quality product, that way you can don't have to make major bd/ft production to just have cash flow. Better products bring higher prices. Sounds like you could access the timber with a tractor and winch, or even a horse or 2 and a good logging arch. Plus if you are into the gardening, you could sell the lesser quality stuff and maybe even wider slabs as garden box material. Sure sounds like a good opportunity. Norwood makes a few real nice mills that would be easier on the pocketbook, and give you a good return for your investment, IMO.

 

[hunterbuild]

Go with a manual mill. With your loader you can get by. Just cut your own lumber and some to supplement your other income. When you see the lumber come off your own mill you will be hooked. Cut some things like fireplace mantels things the big guys don't mess with. I got a Harbor Freight mill a few years ago for $1700. I see they on sale for $1900 now. The next higher mill the woodland, its a similar mill. You can make some good money if you can find a niche. Also its really fun.

 

[hamish]

In your locality you will most like fare better selling firewood unless you choose to go big and add a kiln in order have value added products available. Boards can sit for a long time, firewood is gone in a heartbeat. The lumber you bought in the past year was most likely SPF (spruce,pine,fir) not the hardwoods you are looking at harvesting.
Just some things to consider.

 

[Mike Van]

Around here, most all woodworkers and cabinet people want kiln dried wood, they're worried about bugs [for good reason] for one thing, and the ungraded lumber / building inspector for another. Some 20+ years ago, I sawed & stored air dried lumber, , stickers, end seal, etc in one of the barns, some of it's still in there. Made into firewood, it's gone in a year. My best market has turned out to be the cut to order RS for sheds, horse stalls, sills, raised garden beds, bridge & trailer decks, etc. In the last month, I've had 25+ calls for dry firewood [been out since thanksgiving] but no calls for any of the boards I sawed 20 years ago. Air dried cabinet wood can be a risk, no one wants to do a 10k kitchen to have the customer call in a few months & say "theres piles of sawdust on all my shelves"